Democrats Attempt Two Birds, One Stone Trick With College Aid Plan

Leading Democrats in Congress announced yesterday that they are seeking to combine a college aid bill designed to cut out the private loan middleman from government financial aid to students with the health care reform bill set for a vote next week.

The aid plan aims to eliminate federal subsidies to private lenders, thus having all student loans to students come straight from the federal government. This plan would save money, thus freeing up more funds for the beleaguered Pell Grant program for needy students, as well as the Stafford loan program.

By tying it into the larger (and more controversial) health care reform bill, Democrats are aiming to kill two birds with one stone and earn a much-needed double victory before the mid-term elections in November, which are looking particularly ominous for the majority party. The inclusion of the student aid bill could also add another vote or two to the health care reform bill. Republicans largely oppose both measures, though, so the impact on the final vote tally is minimal at best.

This provision, if passed, could negatively affect private lenders, who make money each year off of federal subsidies. The impact would be spread out over a few years, though, as the bill is designed to gradually increase the amount of funds pumped into the Pell Grant and other programs throughout the rest of the decade.